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Contract Renewal - what to do?

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    #31
    That's why I believe the client rate of 600 is without VA and I do charge VAT to the agency. I reason I know they are taking a big margin initially as they randomly gave me extra £9 on top of the day rate to the original offer without me even asking for it.

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      #32
      Originally posted by JimC View Post
      That's why I believe the client rate of 600 is without VA and I do charge VAT to the agency.
      As others have said, you need to be sure here. It's a massive difference. If they're only taking about £50 a day, then you're not going to get more than about £10-£15 increase (I'd say even 10 is unlikely).

      Originally posted by JimC View Post
      I reason I know they are taking a big margin initially as they randomly gave me extra £9 on top of the day rate to the original offer without me even asking for it.
      This could be for a number of other reasons. I've had contracts that are different to the rate discussed because the agency is on a fixed % margin and they'd not worked out the difference precisely or just rounded to the nearest 10. If is the case your chances of taking any of the agencies margin is 0 as they will not breach the contract with the client to keep you happy.

      Comment


        #33
        If the margin of the agency charged to the client is important, this should be negotiated up front. No legal reason why it can't be contractually agreed.

        If it isn't in the contract they can charge what ever margin they like.

        However if you introduce margin into your demands then you will find your choice of contracts will be reduced as many agencies wouldn't take the negotiations any further. It also won't necessarily improve your rate, as in my experience there is no correlation between margin and rate. The highest rate I ever had was with a consultancy that charged the highest margin. The lowest margin I experienced with an agency, set by the client was also the agency paying the lowest rate. In effect the client pocketed the "saving".

        My advice know your market rate and maximise that, ignore margin.
        Last edited by BlasterBates; 7 September 2017, 10:46.
        I'm alright Jack

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          #34
          Originally posted by JimC View Post
          I'm new to contracting and just coming up to the last month of my current contract. Just got emailed by the line manager confirming that my contract will be renewed for another 6 months.

          I wish to stay on but want to negotiate for a higher rate, what's the usual response?

          Do I reply to the email and say thanks and wait for the new contract from the agent to discuss the new rate with my agent?

          Any advice please
          Secure another offer and strengthen your bargaining position, anyone who thinks your rate is tied to the value you add, vs what you can get out of them is kidding themselves

          Comment


            #35
            Originally posted by JimC View Post
            Im getting 450 and client paying 600
            So is this 25% or 33% agency cut? What's the widely accepted standard of calculating this?

            Comment


              #36
              I think the lesson for the OP here is not to get hung up on what the agency gets. It will lead nowhere. I once worked a contract where the agency cut was 20% I tried to squeeze them and they just said no. If you're happy with the rate you're on then be happy.

              Don't forget the agency can pull you with the client or just work to have you replaced if you kick up an unreasonable fuss. And your irreplaceable, niche skills are unlikely to be that rare.

              Comment


                #37
                Originally posted by zonkkk View Post
                So is this 25% or 33% agency cut? What's the widely accepted standard of calculating this?
                25%

                It's always a cut of the agency rate never a markup on the contractor rate.

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                  #38
                  He who dares Rodney. My advice would be to stick your CV on jobserve with your new experience. Two reasons. 1) tests the market to see what sort of roles/rates are around. 2) it is likely that your agent will get notified that your CV has been uploaded, thus strengthening your negotiating position.
                  "You can't climb the ladder of success, with your hands in the pockets"
                  Arnold Schwarzenegger

                  Comment


                    #39
                    Originally posted by radish2008 View Post
                    I think the lesson for the OP here is not to get hung up on what the agency gets. It will lead nowhere. I once worked a contract where the agency cut was 20% I tried to squeeze them and they just said no. If you're happy with the rate you're on then be happy.

                    Don't forget the agency can pull you with the client or just work to have you replaced if you kick up an unreasonable fuss. And your irreplaceable, niche skills are unlikely to be that rare.
                    Really? I doubt that happens often. The agency/agent is providing a fairly simple service to client. The client needs x work done, the agency by suddenly pulling you away from client or trying to get you removed for their own reasons (not of benefit to client) is counter that.
                    I'm fairly sure most clients, if they get the feeling they're taking the p*** with their commission or trying to get a good contractor taken out of client site for their own reasons, most clients would go ape**** at the agency. There's nothing special about the service agencies provide for us or to clients, it's just like temping IMO.
                    Recently a contractor told client his agency were delaying payments.....agency were removed from preferred supplier and contractor was able to contract directly with client co as agency were in breach of their contract with client co.
                    Don't think any agency should have grand ideas about what they provide to clients, they're really just middle-men, pimps . Most clients could and should use their own HR departments and save some £. Most clients chuck some kind of job spec at the agency, they don't approach them for advice IMO.

                    Originally posted by fidot View Post
                    25%

                    It's always a cut of the agency rate never a markup on the contractor rate.
                    Some clients work on flat rate with agency, gives complete transparency. Agency finds a contractor and they get 10% commission so it's not always the agency taking a cut of the money on offer. At least 2 of my last 4 contracts have been with the agency having a 10% commission.
                    Last edited by SuperZ; 9 September 2017, 13:22.

                    Comment


                      #40
                      Originally posted by SuperZ View Post
                      Really? I doubt that happens often. The agency/agent is providing a fairly simple service to client. The client needs x work done, the agency by suddenly pulling you away from client or trying to get you removed for their own reasons (not of benefit to client) is counter that.
                      I'm fairly sure most clients, if they get the feeling they're taking the p*** with their commission or trying to get a good contractor taken out of client site for their own reasons, most clients would go ape**** at the agency. There's nothing special about the service agencies provide for us or to clients, it's just like temping IMO.
                      Recently a contractor told client his agency were delaying payments.....agency were removed from preferred supplier and contractor was able to contract directly with client co as agency were in breach of their contract with client co.
                      Don't think any agency should have grand ideas about what they provide to clients, they're really just middle-men, pimps . Most clients could and should use their own HR departments and save some £. Most clients chuck some kind of job spec at the agency, they don't approach them for advice IMO.


                      Some clients work on flat rate with agency, gives complete transparency. Agency finds a contractor and they get 10% commission so it's not always the agency taking a cut of the money on offer. At least 2 of my last 4 contracts have been with the agency having a 10% commission.
                      I said it could happen.

                      You say 'Most clients' quite a lot. You also, unless you've seen their contract, have no idea what the agency cut is - only what they tell you it is.

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